Service Tax on Hospital Services

This query is : Resolved

Sunilkumar.P.R.

Sunilkumar.P.R. (Querist)
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17 March 2011 Sirs,

Could any one advise me on:-

Whether the service tax on hospitals as per Finance Act 2010 is replaced with the new provision in SECTION 65(105)(zzzzo)] or it is over and above that.

Jainish shah

Jainish shah (Expert)
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17 March 2011 Services provided by clinical establishments [section 65 (105) (zzzzo)]:

The existing levy on health services is proposed to be replaced as follows:

(i) Any service provided by a clinical establishment having the facility of central air-conditioning in any part of the establishment and more than 25 beds for in-patient treatment at anytime of the year;

(ii) Diagnostic services provided by a clinical establishment with the aid of laboratory or medical equipment; and

(iii) Health-related services provided by doctors, not being employees, providing health-related services from the premises of a clinical establishment.

Regards

Jainish shah

Sunilkumar.P.R.

Sunilkumar.P.R. (Querist)
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17 March 2011 Did you mean that the Earlier rule is not applicable now. That is the rule of charging service tax on services provided by hospitals, nursing home or multi-specialty clinic are taxable if the same is provided to-

A. an employee of any business entity, in relation to health check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic; or

B. to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic;

I heard from some body that it is still there. The new amendment is besides that. Only thing is that the rate is 5%

Could you please advise

Regards

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Sunilkumar.P.R.

Sunilkumar.P.R. (Querist)
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17 March 2011 Sir,

Since ours is a hospital, we are providing services apart from selling drugs and consumables to the patients. Our bill clearly differentiates services from consumables and drugs. We charge service tax on services portion only and not on consumables and drugs. But Insurance companies insist that we charge service tax on amount payable/sanctioned by them.

Do we need to charge service tax on drugs and consumables also.

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